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AnnaLee Saxenian, Migration, Silicon Valley, and Entrepreneurship.

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Shame on me! How is it possible I mention so little AnnaLee Saxenian in this blog, as well as the importance of migrants in entrepreneurship? I had shortly mentioned Regional Advantage in Silicon Valley – more of the same?, but this was more about the openness of Silicon Valley culture and why it did a better job than the Boston area.

It might be because migration was a big feature of my book and nothing new came out thereafter even if the topic is of utmost importance. So let me address the topic of Immigrants again now. In her second book, published in 2006, The New Argonauts: Regional Advantage in a Global Economy Saxenian analyzed the importance of migrants in high-tech entrepreneurship, both for the USA and for the countries of origin of these migrants.

Saxeninan-TheNewArgonauts

In a related paper, she had written: “In the United States, discussions of the immigration of scientists and engineers have focused primarily on the extent to which foreign-born professionals displace native workers. The view from sending countries, by contrast, has been that the emigration of highly skilled personnel to the United States represents a big economic loss, a brain drain. Neither view is adequate in today’s global economy. Far from simply replacing native workers, foreign-born engineers are starting new businesses and generating jobs and wealth at least as fast as their U.S. counterparts. And the dynamism of emerging regions in Asia and elsewhere now draws skilled immigrants homeward. Even when they choose not to return home, they are serving as middlemen linking businesses in the United States with those in distant regions.” [Brain Circulation: How High-Skill Immigration Makes Everyone Better Off – 2002 – http://www.brookings.edu/research/articles/2002/12/winter-immigration-saxenian] In the end, she added: “Essentially, the new argonauts are people who have learned the Silicon Valley model, usually by doing graduate work in the U.S. and getting absorbed into the Silicon Valley boom. They marinated in the Silicon Valley culture and learned it. This really began in the late ‘80s for the Israelis and Taiwanese, and not until the late ‘90s or even the beginning of the ‘00s for the Indians and Chinese. They began to realize that they could take advantage of their own personal networks in their home countries to provide skill that was scarce in the Valley, and that they could even go home and start businesses there that would tap their old networks. Usually, they were going home and tapping their undergraduate colleagues or their friends from the military, in the case of Israel. They knew and they understood how to work the institutions and the culture of those places, often the language too, better than anyone else in the world.”

From the New Argonauts, I will take only two small paragraphs: “Graduating classes from the elite engineering program at National Taiwan University, for example, came to the United States in the 1980s, as did a majority of engineering and computer science graduates from the prestigious Indian Institutes of Technology. Technical universities from smaller countries like Ireland and Israel also report large proportions of graduates leaving to study in the United States, although their numbers are too small to show up in the aggregate data. [Page 50]

Now the depressing argument! “The technical elite in countries like France and Japan move automatically into high-status positions at the top of the large corporations or the civil service. They have little incentive to study or work abroad, and often face significant opportunity costs if they do. As a result, relatively few pursue graduate education in the United States, and those who do often return home directly after graduation. Those who end up in Silicon Valley for a period are not likely to gain access to capital, professional opportunities, or respect when they return home.” [Page 333]

Saxenian has a long history on the topic. She began in 1999 when she published Silicon Valley’s New Immigrant Entrepreneurs. In two related studies, Saxenian and colleagues had a much deeper quantitative analysis. These were America’s New Immigrant Entrepreneurs in 2007 by Vivek Wadhwa, AnnaLee Saxenian, Ben Rissing, and Gary Gereffi; it was updated in 2012 in America’s New Immigrant Entrepreneurs: – Then and Now written by Vivek Wadhwa, AnnaLee Saxenian and F. Daniel Siciliano.

America-New-Immigrants

There is one table I had used in my book which I found striking: Europe has many Silicon Valley migrants as shown below. But we have not been capable (yet) of using them fruitfully as Asia did. We only begin…
Europe sees the value of migration (still only one way, attracting talent) and hopefully we will benefit from accepting the lessons…

Silicon Valley – more of the same?

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I was cleaning and filing old papers in my office, when I found “old” books about Silicon Valley and noticed how this amazing region has not really changed in the last 30 years. Let me just elaborate. The first book I looked at is Silicon Valley Fever.

Here is the back cover:

The next one is The New Venturers

with its back cover too:

Both were written in the mid-eighties. The New Venturers does not seem to be printed anymore and I wrote on Amazon in 2009, when I bought it, “In the mid 80s John Wilson published this book about venture capital. At the time, it was about business and how venture capital works. It has now become a history book and it shows how Silicon Valley developed in part thanks to venture capital. It is full of anecdotes, facts and figures. A great book… ”

Silicon Valley Fever is also out of print and there is no review for that one on Amazon! It is also a book I enjoyed reading. As a funny coincidence, the authors began their book with their history of Apple whereas my first chapter was the history of Google. Each decade has its role models. There is a section about Women and Entrepreneurship that Pemo Theodore would certainly appreciate: “The Silicon Valley has been called “one of the last great bastions of male dominance” by the local Peninsula Times Tribune. […] They are under-represented in management and administration. Few women have technical or engineering backgrounds. […] Why there are few women in positioning of responsability in Silicon Valley is complex and puzzling. Until recently, the overwhelming majority of engineering garduates were men. […] Scientific and engineering professionals in the finance community and in start-ups are likely to be men: these power-brokers rely exclusively on tehir personal networks. […] Twenty of the largest publicly held Silicon Valley firms listed a total of 209 persons as corporate officers in 1980; only 4 were women. The board of directors of these 20 firms include 150 directors. Only one was a woman: Shirley Hufstedler, serving on the board of Hewlett-Packard.” But the authors are optimistic: they explain that any woman with a technical background or an interest in high-tech has opportunities: “A Martian with three heads could find a job in Silicon Valley. So for women with a technical background, it’s terrific. […] An exception to masculine dominance is Sandy Kurtzig. “I wanted to start in a garage like HP, but I didn’t have one. So I started in a second bedroom of my apartment.” At first, Kurtzig did sales, bookkeeping and management of her start-up. As long as she had only five or six employees, they worked out of her apartment. It went into rapid growth and had annual sales in 1982.”

Part I of the book is historical, part II is the culture of Silicon Valley and part III is about its future (as foreseen in 1984). The final book I found is certainly not out of print. Written 10 years later by Annalee Saxenian, Regional Advantage is the reference book about Silicon Valley. It is one of my bibles. Saxenian compares the culture of Silicon Valley and Route 128 (the Boston cluster).

Funnily enough, she had this honnest recognition in 1998: “In 1979, I was a graduate student at Berkeley and I was one of the first scholars to study Silicon Valley. I culminated my master’s program by writing a thesis in which I confidently predicted that Silicon Valley would stop growing. I argued that housing and labor were too expensive and the roads were too congested, and while corporate headquarters and research might remain, I was convinced that the region had reached its physical limits and that innovation and job growth would occur elsewhere during the 1980s. As it turns out I was wrong.” (Source: A climate for Entrepreneurship)

Let me just put here pictures of the preface of the book that you can find on Amazon or Google books. It is enlighting and will be my conclusion of this post: Silicon Valley was and is the innovation center with many ups and downs that these three books describe with their own style.